FTD Companies, Inc. Announces Second Quarter 2016 Financial Results
"We are pleased with the growth in revenues across our International and Florist segments as well as our gifting brands, however, we faced topline headwinds in our
Robert Apatoff. "While we expect it will take time to fully realize the benefits of our strategic initiatives across our floral businesses, we remain confident in our ability to deliver future growth in revenues in these businesses, over the long-term. We also remain intently focused on enhancing our strong profitability, margins and cash flow and delivering shareholder value."
Second Quarter Results
Consolidated revenues were
Net income was
Adjusted EBITDA was
Six Month Results
Consolidated revenues were
Net income was
Adjusted EBITDA was
Segment Results
Consumer Segment: Consumer segment revenues for the second quarter of 2016 decreased 6.9% to
Consumer segment revenues for the first six months of 2016 decreased 8.7% to
Provide Commerce Segment: Provide Commerce segment revenues for the second quarter of 2016 decreased 10.2% to
Provide Commerce segment revenues for the first six months of 2016 decreased 12.2% to
Florist Segment: Florist segment revenues for the second quarter of 2016 increased 0.4% to
Florist segment revenues for the first six months of 2016 increased 1.3% to
International Segment: International segment revenues for the second quarter of 2016 were
International segment revenues for the first six months of 2016 were
Balance Sheet and Cash Flow Highlights
Net cash provided by operating activities was
Cash and cash equivalents were
Under the Company's existing stock repurchase program, the Company repurchased 0.3 million shares in the six-month period ended
Business Outlook
For the full year 2016, the Company has updated its outlook. The Company now expects the following:
- Consolidated revenues to decline 5% to 7% compared to
\\$1.22 billion of revenues in 2015 - Net income of approximately
\\$4 million to\\$8 million - Consolidated Adjusted EBITDA of
approximately
\\$121 million to\\$126 million , representing Adjusted EBITDA margin of approximately 11% - Capital expenditures of approximately
\\$20 million - Amortization of intangible assets of approximately
\\$61 million , in line with 2015 - Stock-based compensation expense of approximately
\\$16 million - The Company's guidance includes an expectation of an exchange rate of
\\$1.26 to ?1.00 in the second half of 2016
In connection with the outlook provided above, please note that the seasonality of the Company's business impacts its profitability and cash flows from operations on a quarterly basis. The Company anticipates positive Consolidated Adjusted EBITDA in every quarter of 2016 and positive Free Cash Flow for full year 2016. Due to a variety of factors, however, actual results may differ significantly from the outlook provided. Factors include, without limitation, the factors referenced in this release under "Cautionary Information Regarding Forward-Looking Statements."
Conference Call
The Company will be hosting a conference call today,
A telephonic playback and archived webcast will be available through
About
Cautionary Information Regarding Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements.
These forward-looking statements include, but are not limited to, statements about the Company's strategies and future financial performance; statements regarding expected synergies and benefits of the Company's acquisition of Provide Commerce; expectations about future business plans, prospective performance and opportunities, including potential acquisitions; revenues; segment metrics; operating expenses; market trends, including those in the markets in which the Company competes; liquidity; cash flows and uses of cash; capital expenditures; depreciation and amortization; tax payments; foreign currency exchange rates; hedging arrangements; the Company's ability to repay indebtedness and invest in initiatives; the Company's products and services; pricing; marketing plans; competition; settlement of legal matters; and the impact of accounting changes and other pronouncements. Potential
factors that could affect these forward-looking statements include, among others, the factors disclosed in the Company's most recent Annual Report on Form 10-K and the Company's other filings with the
Non-GAAP Measures
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses following non-GAAP measures: Adjusted EBITDA, Adjusted Net Income and Free Cash Flow as measures of certain components of financial performance. The Company's definitions of Adjusted EBITDA, Adjusted Net Income and Free Cash Flow, as set forth below, may be modified from time to time.
Management believes that Adjusted EBITDA is an important measure of operating performance because it allows for a period-to-period comparison of the Company's operating performance by removing the impact of the Company's capital structure (interest expense on outstanding debt), asset base (depreciation and amortization), tax consequences, other non-operating items and stock-based compensation. The Company further emphasizes the importance of Adjusted EBITDA as an operating performance measure by utilizing the Adjusted EBITDA measure as a basis for determining certain incentive compensation targets for certain members of the Company's management. The Adjusted EBITDA measure also is used as a performance measure under the Company's senior secured credit facility and includes adjustments such as the items defined above and other further adjustments, which are defined in the senior secured credit facility.
Management also believes that Adjusted Net Income provides a useful measure of performance that facilitates period-to-period comparisons because it excludes non-cash items and other items that do not necessarily arise as part of the normal day-to-day operations of the Company and could distort an analysis of trends in business performance.
Further, management believes that Free Cash Flow provides a relevant measure of the Company's liquidity in evaluating its financial performance and ability to generate cash without additional external financing in order to repay debt obligations, repurchase shares and fund acquisitions or other business initiatives.
Management believes that presenting these non-GAAP financial measures provides additional information to facilitate comparison of the Company's historical operating results and trends in its underlying operating results, and provides additional transparency on how the Company evaluates its businesses.
In addition to the use of these non-GAAP measures by management for the purposes outlined above, the Company believes Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are measures widely used by securities analysts, investors and others to evaluate the financial performance of the Company and its competitors.
Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A limitation associated with the use of Adjusted EBITDA is that it does not reflect depreciation and amortization expense for various long-lived assets, interest expense, income taxes and other items that have been and
will be incurred. Each of these items should also be considered in the overall evaluation of the Company's results. In addition, Adjusted EBITDA and Free Cash Flow do not reflect capital expenditures and other investing activities and should not be considered by themselves as measures of the Company's liquidity. An additional limitation associated with Adjusted EBITDA and Adjusted Net Income is that the measures do not include stock-based compensation expenses related to the Company's workforce. A further limitation associated with the use of these non-GAAP financial measures is that they do not reflect expenses or gains that are not considered reflective of the Company's core operations. Management compensates for these limitations by providing the relevant disclosure of its depreciation and amortization, interest and income tax expenses, capital expenditures, stock-based compensation
and other items within its financial press releases and
A further limitation associated with the use of these measures is that the terms "Adjusted EBITDA," "Adjusted Net Income" and "Free Cash Flow" do not have standardized meanings. Therefore, other companies may use the same or a similarly named measure but exclude different items or use different computations, which may not provide investors a comparable view of the Company's performance in relation to other companies. Management compensates for this limitation by presenting the most comparable GAAP measures: net income, directly ahead of Adjusted EBITDA and Adjusted Net Income; and Cash Provided by Operations, directly ahead of Free Cash Flow, within this and other financial press releases and by providing reconciliations that show and describe the adjustments made. In addition, many of the adjustments to the Company's GAAP financial measures reflect the exclusion of items that are recurring in nature and will be reflected in the Company's financial results for the foreseeable future.
The Company also presents certain results for the International segment on a constant currency basis. Constant currency information compares results between periods as if foreign currency exchange rates had remained consistent period-over-period. The Company's International segment operates principally in the
Definitions
(1) Segment operating income. The Company's chief operating decision maker uses segment operating income to evaluate the performance of the business segments and to make decisions about allocating resources among segments. Segment operating income is operating income excluding depreciation, amortization, litigation and dispute settlement charges and gains, transaction-related costs, restructuring and other exit costs, and impairment of goodwill and intangible assets. Stock-based compensation and general corporate expenses are not allocated to the segments. Segment operating income is prior to intersegment eliminations and excludes other income (expense). Please refer to the tables in this press release for a reconciliation of segment operating income to net income.
(2) Consumer orders. The Company monitors the number of consumer orders for floral, gift, and related products during a given period. Consumer orders are individual units delivered during the period that originated in the
(3) Average order value. The Company monitors the average value for
consumer orders delivered in a given period, which is referred to as the average order value. Average order value represents the average amount received for consumer orders delivered during a period. The average order value of consumer orders within the Consumer, International, and Provide Commerce segments is tracked in their local currency, the
(4) Average revenues per member. The Company monitors average revenues per member for floral network members in the Florist segment. Average revenues per member represents the average revenues earned from a member of the Company's floral network during a period. Revenues include services revenues and products revenues, but exclude revenues from sales to non-members. Floral network members include retail florists and other non-florist retail locations that offer floral and gifting solutions. Average revenues per member is calculated by dividing Florist segment revenues for the period, excluding sales to non-members, by the average number of floral network members for the period.
(5) Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as net income before net interest expense, provision (benefit) for income taxes, depreciation, amortization, stock-based compensation, transaction-related costs, litigation and dispute settlement charges and gains, restructuring and other exit costs, and impairment of goodwill and intangible assets.
Litigation and dispute settlement charges and gains include estimated losses for which the Company has established a reserve, as well as actual settlements, judgments, fines, penalties, assessments or other resolutions against, or in favor of, the Company related to litigation, arbitration, investigations, disputes, or similar matters. Insurance recoveries received by the Company related to such matters are also included in these adjustments.
Transaction-related costs are certain expense items resulting from actual or potential transactions such as business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions, including, without limitation, (i) compensation expenses related to deal bonuses and (ii) expenses for advisors and representatives such as investment bankers, consultants, attorneys, and accounting firms. Transaction-related costs may also include, without limitation, transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees, in addition to consulting, compensation, and other incremental costs directly associated with integration projects.
(6) Free Cash Flow. The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures, plus cash paid for transaction-related costs, cash paid for litigation and dispute settlement charges and gains, and cash paid for restructuring and other exit costs.
(7) Adjusted Net Income. The Company defines Adjusted Net Income as net income excluding the after tax impact of stock-based compensation, amortization, transaction-related costs, litigation and dispute settlement charges and gains, restructuring and other exit costs, loss on extinguishment of debt, and impairment of goodwill and intangible assets.
Contacts
Investor Relations:
Jandy Tomy
630-724-6984
ir@ftdi.com
Media Inquiries:
Amy Toosley
858-638-4648
pr@ftdi.com
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Consumer segment | \\$ | 90,930 | \\$ | 97,652 | \\$ | 169,589 | \\$ | 185,722 | ||||||||||||
| Provide Commerce segment | 176,542 | 196,548 | 333,639 | 379,784 | ||||||||||||||||
| Florist segment | 43,358 | 43,165 | 90,350 | 89,169 | ||||||||||||||||
| International segment | 33,383 | 33,906 | 86,096 | 89,162 | ||||||||||||||||
| Intersegment eliminations | (5,642 | ) | (5,470 | ) | (10,501 | ) | (10,255 | ) | ||||||||||||
| Total revenues | 338,571 | 365,801 | 669,173 | 733,582 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 209,965 | 228,027 | 423,991 | 464,452 | ||||||||||||||||
| Sales and marketing | 65,957 | 70,638 | 133,873 | 147,050 | ||||||||||||||||
| General and administrative | 28,138 | 29,363 | 57,633 | 62,498 | ||||||||||||||||
| Amortization of intangible assets | 15,217 | 15,336 | 30,633 | 30,737 | ||||||||||||||||
| Restructuring and other exit costs | 1,185 | 2,244 | 1,618 | 4,412 | ||||||||||||||||
| Total operating expenses | 320,462 | 345,608 | 647,748 | 709,149 | ||||||||||||||||
| Operating income | 18,109 | 20,193 | 21,425 | 24,433 | ||||||||||||||||
| Interest expense, net | (2,255 | ) | (2,359 | ) | (4,569 | ) | (4,667 | ) | ||||||||||||
| Other income, net | 4 | 437 | 1,813 | 426 | ||||||||||||||||
| Income before income taxes | 15,858 | 18,271 | 18,669 | 20,192 | ||||||||||||||||
| Provision for income taxes | 3,755 | 452 | 4,475 | 339 | ||||||||||||||||
| Net income | \\$ | 12,103 | \\$ | 17,819 | \\$ | 14,194 | \\$ | 19,853 | ||||||||||||
| Earnings per common share: | ||||||||||||||||||||
| Basic earnings per share | \\$ | 0.43 | \\$ | 0.61 | \\$ | 0.50 | \\$ | 0.67 | ||||||||||||
| Diluted earnings per share | \\$ | 0.43 | \\$ | 0.61 | \\$ | 0.50 | \\$ | 0.67 | ||||||||||||
| Average Shares Outstanding: | ||||||||||||||||||||
| Basic | 27,640 | 28,693 | 27,647 | 28,953 | ||||||||||||||||
| Diluted | 27,695 | 28,728 | 27,705 | 29,004 | ||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (in thousands) | ||||||
| 2016 | 2015 | |||||
| ASSETS | ||||||
| Cash and cash equivalents | \\$ | 56,099 | \\$ | 57,892 | ||
| Accounts receivable, net | 24,401 | 28,177 | ||||
| Inventories | 23,102 | 25,611 | ||||
| Property and equipment, net | 60,134 | 64,753 | ||||
| Intangible assets, net | 305,894 | 340,559 | ||||
| 553,216 | 561,656 | |||||
| Other assets (a) | 34,074 | 43,080 | ||||
| Total assets | \\$ | 1,056,920 | \\$ | 1,121,728 | ||
| LIABILITIES AND EQUITY | ||||||
| Accounts payable and accrued liabilities | \\$ | 110,212 | \\$ | 157,728 | ||
| Debt (a) | 285,626 | 294,946 | ||||
| Deferred tax liabilities, net | 103,193 | 112,769 | ||||
| Other liabilities | 15,532 | 15,059 | ||||
| Total liabilities | 514,563 | 580,502 | ||||
| Total equity | 542,357 | 541,226 | ||||
| Total liabilities and equity | \\$ | 1,056,920 | \\$ | 1,121,728 | ||
| (a) - During the first quarter of 2016, the company adopted the accounting guidance related to the presentation of debt issuance costs. The | ||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income | \\$ | 12,103 | \\$ | 17,819 | \\$ | 14,194 | \\$ | 19,853 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by/(used for) operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 21,239 | 21,158 | 42,516 | 41,913 | ||||||||||||||||
| Impairment of fixed assets | 398 | 1,282 | 398 | 1,282 | ||||||||||||||||
| Stock-based compensation | 3,440 | 2,398 | 7,480 | 4,340 | ||||||||||||||||
| Provision for doubtful accounts receivable | 1,115 | 624 | 2,808 | 909 | ||||||||||||||||
| Amortization of debt issue costs | 340 | 340 | 680 | 680 | ||||||||||||||||
| Deferred taxes, net | (6,420 | ) | 537 | (8,935 | ) | (4,296 | ) | |||||||||||||
| Excess tax (benefits) shortfalls from equity awards | (310 | ) | 50 | (306 | ) | (339 | ) | |||||||||||||
| Gains on life insurance | — | — | (1,583 | ) | — | |||||||||||||||
| Other, net | 59 | (24 | ) | 60 | 29 | |||||||||||||||
| Changes in operating assets and liabilities, net of acquisition related purchase accounting adjustments: | ||||||||||||||||||||
| Accounts receivable, net | 5,406 | 10,059 | 697 | 5,620 | ||||||||||||||||
| Inventories | 4,361 | 5,320 | 2,412 | 2,990 | ||||||||||||||||
| Prepaid expenses and other assets | 638 | 3,121 | 4,844 | 7,446 | ||||||||||||||||
| Accounts payable and accrued liabilities | (37,310 | ) | (40,812 | ) | (46,665 | ) | (40,687 | ) | ||||||||||||
| Income taxes receivable or payable | 2,259 | (12,146 | ) | 5,040 | (9,567 | ) | ||||||||||||||
| Other liabilities | (804 | ) | (4,273 | ) | 449 | (2,777 | ) | |||||||||||||
| Net cash provided by operating activities | 6,514 | 5,453 | 24,089 | 27,396 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchases of property and equipment | (3,565 | ) | (3,930 | ) | (8,176 | ) | (7,532 | ) | ||||||||||||
| Proceeds from life insurance | — | — | 944 | — | ||||||||||||||||
| Cash paid for acquisitions, net of cash acquired | — | (9,935 | ) | — | (9,935 | ) | ||||||||||||||
| Net cash used for investing activities | (3,565 | ) | (13,865 | ) | (7,232 | ) | (17,467 | ) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Payments on long-term debt | (5,000 | ) | (5,000 | ) | (10,000 | ) | (30,000 | ) | ||||||||||||
| Exercise of stock options and purchases from employee stock plans | 1,304 | 478 | 1,304 | 485 | ||||||||||||||||
| Repurchases of common stock | (8,179 | ) | (10,009 | ) | (9,812 | ) | (22,021 | ) | ||||||||||||
| Excess tax benefits (shortfalls) from equity awards | 310 | (50 | ) | 306 | 339 | |||||||||||||||
| Net cash used for financing activities | (11,565 | ) | (14,581 | ) | (18,202 | ) | (51,197 | ) | ||||||||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (505 | ) | 482 | (448 | ) | (448 | ) | |||||||||||||
| Change in cash and cash equivalents | (9,121 | ) | (22,511 | ) | (1,793 | ) | (41,716 | ) | ||||||||||||
| Cash and cash equivalents, beginning of period | 65,220 | 76,390 | 57,892 | 95,595 | ||||||||||||||||
| Cash and cash equivalents, end of period | \\$ | 56,099 | \\$ | 53,879 | \\$ | 56,099 | \\$ | 53,879 | ||||||||||||
| Supplemental Cash Flow Information: | ||||||||||||||||||||
| Cash paid for interest | \\$ | 2,160 | \\$ | 1,965 | \\$ | 3,601 | \\$ | 4,121 | ||||||||||||
| Cash paid for income taxes, net | 7,765 | 12,353 | 8,201 | 14,202 | ||||||||||||||||
| Cash paid for restructuring and other exit costs | 537 | 3,437 | 1,302 | 3,455 | ||||||||||||||||
| Cash paid for litigation and dispute settlement charges | 197 | 2,282 | 364 | 2,282 | ||||||||||||||||
| Cash paid for transaction-related costs | 347 | 1,879 | 665 | 4,997 | ||||||||||||||||
| UNAUDITED SEGMENT INFORMATION | ||||||||||||
| (in thousands, except average order values, average revenues per member, and average currency exchange rates) | ||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Consumer: | ||||||||||||
| Segment revenues | \\$ | 90,930 | \\$ | 97,652 | \\$ | 169,589 | \\$ | 185,722 | ||||
| Segment operating income (1) | \\$ | 10,924 | \\$ | 10,884 | \\$ | 17,398 | \\$ | 18,354 | ||||
| Consumer orders (2) | 1,223 | 1,343 | 2,245 | 2,511 | ||||||||
| Average order value (3) | \\$ | 70.18 | \\$ | 68.74 | \\$ | 71.31 | \\$ | 69.97 | ||||
| Provide Commerce: | ||||||||||||
| Segment revenues | \\$ | 176,542 | \\$ | 196,548 | \\$ | 333,639 | \\$ | 379,784 | ||||
| Segment operating income (1) | \\$ | 22,177 | \\$ | 26,074 | \\$ | 29,253 | \\$ | 34,986 | ||||
| Consumer orders (2) | 3,502 | 4,006 | 6,625 | 7,585 | ||||||||
| Average order value (3) | \\$ | 49.78 | \\$ | 48.84 | \\$ | 49.73 | \\$ | 49.75 | ||||
| Florist: | ||||||||||||
| Segment revenues | \\$ | 43,358 | \\$ | 43,165 | \\$ | 90,350 | \\$ | 89,169 | ||||
| Segment operating income (1) | \\$ | 12,550 | \\$ | 12,113 | \\$ | 25,360 | \\$ | 26,260 | ||||
| Average revenues per member (4) | \\$ | 3,742 | \\$ | 3,456 | \\$ | 7,631 | \\$ | 7,076 | ||||
| International: | ||||||||||||
| Segment revenues (in USD) | \\$ | 33,383 | \\$ | 33,906 | \\$ | 86,096 | \\$ | 89,162 | ||||
| Segment revenues (in GBP) | ? | 23,248 | ? | 22,096 | ? | 60,089 | ? | 58,613 | ||||
| Segment operating income (in USD) (1) | \\$ | 4,279 | \\$ | 3,823 | \\$ | 12,028 | \\$ | 11,800 | ||||
| Consumer orders (2) | 541 | 539 | 1,419 | 1,426 | ||||||||
| Average order value (in USD) (3) | \\$ | 50.41 | \\$ | 51.64 | \\$ | 49.91 | \\$ | 51.29 | ||||
| Average order value (in GBP) (3) | ? | 35.13 | ? | 33.66 | ? | 34.86 | ? | 33.73 | ||||
| Average currency exchange rate: GBP to USD | 1.43 | 1.53 | 1.43 | 1.52 | ||||||||
| UNAUDITED RECONCILIATIONS | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| The following tables contain reconciliations of Adjusted EBITDA, Free Cash Flow, and Adjusted Net Income to financial measures reported | ||||||||||||||||||||
| in accordance with Generally Accepted Accounting Principles ("GAAP") | ||||||||||||||||||||
| RECONCILIATION OF SEGMENT OPERATING INCOME TO NET INCOME | ||||||||||||||||||||
| AND NET INCOME TO ADJUSTED EBITDA | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Segment Operating Income (1) : | ||||||||||||||||||||
| Consumer | \\$ | 10,924 | \\$ | 10,884 | \\$ | 17,398 | \\$ | 18,354 | ||||||||||||
| Provide Commerce | 22,177 | 26,074 | 29,253 | 34,986 | ||||||||||||||||
| Florist | 12,550 | 12,113 | 25,360 | 26,260 | ||||||||||||||||
| International | 4,279 | 3,823 | 12,028 | 11,800 | ||||||||||||||||
| Unallocated expenses | (10,582 | ) | (11,543 | ) | (20,098 | ) | (25,054 | ) | ||||||||||||
| Depreciation and amortization | (21,239 | ) | (21,158 | ) | (42,516 | ) | (41,913 | ) | ||||||||||||
| Operating income | 18,109 | 20,193 | 21,425 | 24,433 | ||||||||||||||||
| Interest expense, net | (2,255 | ) | (2,359 | ) | (4,569 | ) | (4,667 | ) | ||||||||||||
| Other income, net | 4 | 437 | 1,813 | 426 | ||||||||||||||||
| Provision for income taxes | (3,755 | ) | (452 | ) | (4,475 | ) | (339 | ) | ||||||||||||
| Net income (GAAP basis) | \\$ | 12,103 | \\$ | 17,819 | \\$ | 14,194 | \\$ | 19,853 | ||||||||||||
| Net income (GAAP basis) | \\$ | 12,103 | \\$ | 17,819 | \\$ | 14,194 | \\$ | 19,853 | ||||||||||||
| Interest expense, net | 2,255 | 2,359 | 4,569 | 4,667 | ||||||||||||||||
| Provision for income taxes | 3,755 | 452 | 4,475 | 339 | ||||||||||||||||
| Depreciation and amortization | 21,239 | 21,158 | 42,516 | 41,913 | ||||||||||||||||
| Stock-based compensation | 3,440 | 2,398 | 7,480 | 4,340 | ||||||||||||||||
| Transaction-related costs | 1,131 | 1,075 | 1,257 | 5,230 | ||||||||||||||||
| Litigation and dispute settlement charges and gains | 313 | - | 313 | - | ||||||||||||||||
| Restructuring and other exit costs | 1,185 | 2,244 | 1,618 | 4,412 | ||||||||||||||||
| Adjusted EBITDA (5) | \\$ | 45,421 | \\$ | 47,505 | \\$ | 76,422 | \\$ | 80,754 | ||||||||||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Net cash provided by operating activities (GAAP basis) | \\$ | 6,514 | \\$ | 5,453 | \\$ | 24,089 | \\$ | 27,396 | ||||||||||||
| Capital expenditures | (3,565 | ) | (3,930 | ) | (8,176 | ) | (7,532 | ) | ||||||||||||
| Cash paid for transaction-related costs | 347 | 1,879 | 665 | 4,997 | ||||||||||||||||
| Cash paid for litigation and dispute settlement charges and gains | 197 | 2,282 | 364 | 2,282 | ||||||||||||||||
| Cash paid for restructuring and other exit costs | 537 | 3,437 | 1,302 | 3,455 | ||||||||||||||||
| Free Cash Flow (6) | \\$ | 4,030 | \\$ | 9,121 | \\$ | 18,244 | \\$ | 30,598 | ||||||||||||
| RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Net income, as reported (GAAP basis) | \\$ | 12,103 | \\$ | 17,819 | \\$ | 14,194 | \\$ | 19,853 | ||||||||||||
| Stock-based compensation | 3,440 | 2,398 | 7,480 | 4,340 | ||||||||||||||||
| Amortization of intangible assets | 15,217 | 15,336 | 30,633 | 30,737 | ||||||||||||||||
| Transaction-related costs | 1,131 | 1,075 | 1,257 | 5,230 | ||||||||||||||||
| Litigation and dispute settlement charges and gains | 313 | - | 313 | - | ||||||||||||||||
| Restructuring and other exit costs | 1,185 | 2,244 | 1,618 | 4,412 | ||||||||||||||||
| Income tax effect of adjustments to net income | (9,579 | ) | (13,409 | ) | (17,061 | ) | (22,523 | ) | ||||||||||||
| Adjusted Net Income (7) | \\$ | 23,810 | \\$ | 25,463 | \\$ | 38,434 | \\$ | 42,049 | ||||||||||||
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